9911796707
TMI Blog2020 (12) TMI 1370X X X X Extracts X X X X X X X X Extracts X X X X ..... ned AO has raised the following grounds of appeal:- "1. "Whether the DRP was justified in not appreciating the fact the bright line is a mere step [of the most appropriate method for benchmarking the AMP services] carried out to estimate and bifurcate expenditure pertaining to the taxpayer for its own routine distribution function and the expenditure incurred on AMP service provided to the AE in a situation where the assessee has not reported the international transaction pertaining to the marketing function?" 2. "Whether under the facts and circumstance of the case and in law the Hon'ble DRP was correct in holding that PLR cannot be the basis for computing markup on AMP expenses without appreciating the Revenue's case wherein the PLR ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Assessee imports business machine such as multifunction devices/printers/PS, fax machines, LCD display panels, electronic cash register, scientific calculator and assessee is also buying LCD DLP projectors from its associated enterprise for sale in India through varied distribution channel. The assessee has also imported solar modules from its associated enterprise for sale. 7. Assessee has entered into international transactions with respect to distribution functions, cost allocations , reimbursement received and reimbursement paid. In its transfer pricing study report, assessee for distribution function adopted Resale Price Method for benchmarking of international transactions amounting to Rs. 1,514,151,896. It aggregated the cost alloca ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... products. Therefore the learned transfer pricing officer proposed an adjustment on account of AMP expenditure. He considered the explanation of the assessee and thereafter selected seven comparable companies whose average margin of AMP expenditure to sales was 2.01%. The total sales of the assessee was considered at Rs. 2,154,511,000 and arm‟s-length AMP expenditure were determined at Rs. 43,305,671 against which the assessee actually spent AMP expenditure of Rs. 221,974,255 and therefore applying the bright line test the assessee was found to have spent in excess on creation of marketing intangible of Rs. 178,668,584/- . The learned TPO further applied the markup at the rate of 12.26% of amounting to Rs. 21,904,678 and proposed the t ..... X X X X Extracts X X X X X X X X Extracts X X X X
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